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Tax Tips & Tools Center
More answers! The tools you need for an easy tax season.

Frequently Asked Tax Questions

1. How do I figure out which form to use?
2. How do I determine my filing status?
3. How much money do I have to make before I have to file a tax return?
4. If I don't have receipts for my charitable donations, can I claim the donations?
5. Do I have to pay tax on my unemployment income?
6. Can I claim a non-relative for Earned Income Credit (EIC) purposes?
7. Can I claim my child as a dependent even if he or she is no longer a minor?
8. If I claim my child as a dependent, can my child file separately and claim a personal exemption?
9. What should I do if I made a mistake on my federal return that I have already filed?
10. How do I know if I have to file quarterly individual estimated tax payments?
11. I retired last year and now receive a Social Security check. Do I have to pay taxes on my Social Security benefits?
12. What is the earned income tax credit, and how do I know if I qualify?
13. Do I have to pay taxes on the sale of my home?
14. When should I expect my refund?
15. Why didn’t I receive my entire refund?
16. How do I claim the Payroll Tax Cut?
17. Where can I go for more help?

1. How do I figure out which form to use?

Figuring out which federal income tax return to file can be confusing but really boils down to three main questions:

  • Are you itemizing your deductions?
  • What is your filing status?
  • What kind of income are your reporting?

If you plan to itemize your deductions, the choice is simple: you’ll file a federal form 1040, U.S. Individual Income Tax Return (downloads as a pdf). That said, you don’t have to itemize in order to use the federal form 1040: it’s considered the “go to” form for taxpayers. If in doubt, use the 1040.

If you do not plan to itemize your deductions, consider the federal form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents (downloads as a pdf). You can file a federal form 1040EZ if you’re filing as single or married filing jointly with no dependents: you cannot file a 1040EZ if you’re filing as head of household, qualifying widow(er) or married filing separately. If you have dependents, if you’re blind or over age 65, and intend to claim those exemptions and deductions, you can’t file the1040EZ. Lastly, your taxable income must be less than $100,000 and consist only of wages, salaries and tips, taxable interest of less than $1,500 and unemployment compensation or Alaska Permanent Fund dividends.

If you do not plan to itemize your deductions, but your income comes from sources other than those allowed for the 1040EZ, consider the federal form 1040-A, U.S. Individual Income Tax Return (downloads as a pdf). You can file a form 1040-A if your taxable income is less than $100,000 and your income consists of wages, salaries and tips, unemployment compensation or Alaska Permanent Fund dividends as well as interest and dividends; capital gain distributions; IRA distributions; distributions from pensions and annuities; and taxable Social Security and Railroad Retirement Benefits. You can also claim certain “above the line” adjustments may be claimed on a form 1040-A, including educators expenses, IRA deductions, student loan interest deductions and tuition and fees deductions.

Of course, this assumes you are a resident of the United States. If you’re a non-resident, you may still have to file but you’ll use a different set of forms. Consult with your tax professional for more information.

2. How do I determine my filing status?

Your filing status is determined as of your status on the last day of the tax year, December 31. You have five choices:

  • Single. You may only file as single if you are unmarried, divorced or legally separated.
  • Married Filing Jointly. You may file as married filing jointly if you are married under state law, whether or not you are living together; same sex marriage, however, is not recognized for federal income tax purposes. If your spouse died during the tax year and you did not remarry, you may also file as MFJ.
  • Married Filing Separately. You may file as married filing separately if you are married even if you are living together. In most (but not all) cases, filing as married filing separate results in more tax due since you lose the option of claiming some tax preference items. It’s also important to note that that married filing separately still requires coordination: you must agree to both itemize or take the standard deduction.
  • Head of Household. You can file as HOH if you are unmarried (or considered unmarried for federal tax purposes) and provide a home for a dependent. You must be single, divorced, or otherwise unmarried at the end of the tax year and (1) you paid more than 50% to keep a home for the entire tax year for a parent who was a dependent OR (2) you paid more than 50% to keep a home for the entire tax year with your dependent. Special rules apply to divorced or separated parents.
  • Qualifying Widow(er) With Dependent Child. If your spouse died during the year, you can opt to file MFJ for the year of death. If you have a dependent in the home, you can, for the next two years, opt to file as qualifying widow(er) with dependent child so long as you don't get remarried.

3. How much money do I have to make before I have to file a tax return?

For most taxpayers, whether you need to file a tax return depends on your filing status, age and your gross income. Assuming you cannot be claimed as any other taxpayer’s dependent, the general rules are:

  • If you are single and under the age of 65, you must file a tax return if your gross income is at least $9,750. If you are single and age 65 or older, you must file a tax return if your gross income is at least $11,200.
  • If you are married filing jointly and both of you are under age 65, you must file a tax return if your gross income is at least $19,500. If one of you is age 65 or older, you must file a tax return if your gross income is at least $20,650. If both of you are age 65 or older, you must file a tax return if your gross income is at least $21,800.
  • If you are married filing separately, you must file a tax return if your gross income is at least $3,800, no matter your age.
  • If you are head of household and under the age of 65, you must file a tax return if your gross income is at least $12,500. If you are head of household and age 65 or older, you must file a tax return if your gross income is at least $13,950.
  • If you are a qualifying widow(er) with dependent child and under the age of 65, you must file a tax return if your gross income is at least $15,700. If you are a qualifying widow(er) with dependent child and age 65 or older, you must file a tax return if your gross income is at least $16,850.

The rules for taxpayers who can also be claimed as dependents are a little bit different. Your age, marital status and income will all affect the need to file.

Self-employed persons must file a federal income tax return if net earnings are at least $400.

You may also need to file if you owe special taxes like the alternative minimum tax (AMT), household employment taxes, taxes on retirement accounts or Social Security and Medicare tax on tips you did not report to your employer or on wages from an employer who did not withhold those taxes.

4. If I don't have receipts for my charitable donations, can I claim the donations?

You should always keep receipts for charitable donations.

If you don’t have a proper receipt, all is not lost. If you donate cash or cash equivalent (for example, check or gift card), you must keep some kind of written record of the contribution, no matter how small the amount. A written record obviously includes a receipt but can also include a canceled check or other bank record so long it has the name of the charity, the date of the contribution, and the amount of the contribution.

For any contribution of $250 or more for cash or property, you must be able to provide a receipt from the charity indicating the value and a description of the donation. The receipt should also indicate whether the charity provided any goods or services in exchange for the gift since the value of anything you received in exchange must be deducted from the value of your gift.

For other contributions of property, including those worth more than $500, additional documentation is required. See federal form 8283, Noncash Charitable Contributions (downloads as a pdf) for more information.

Keep in mind that charitable contributions are deductible only if you itemize deductions on your tax return.

5. Do I have to pay tax on my unemployment income?

Yes. If you received unemployment compensation during the year, that amount should be reported to you on a federal form 1099-G, Certain Government Payments. You must report those amounts on your federal income tax return.

Supplemental unemployment benefits - those that you might receive as a benefit from your company - are fully taxable as wages. Those will be reported on federal form W-2, Wage and Tax Statement. To the extent that you've paid into a private fund, you'll only pay tax on the amount that exceed your initial contributions.

6. Can I claim a non-relative for Earned Income Credit (EIC) purposes?

No. For purposes of the EIC, a qualifying child must be your son, daughter, adopted child, stepchild, foster child (or a descendent of any of them such as your grandchild) or your brother, sister, half brother, half sister, step brother, step sister (or a descendant of any of them such as a niece or nephew).

7. Can I claim my child as a dependent even if he or she is no longer a minor?

Generally, for U.S. tax purposes, a dependent must be a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico (some exceptions apply for adopted children) and have a valid tax ID number. To be considered your dependent, a person must be either your qualifying child or your qualifying relative and under age 19 at the end of the tax year; under age 24 and a full-time student for at least five months out of the year; or totally and permanently disabled at any age.

Additionally, to claim a child as a dependent, he or she must not have provided more than half of his or her own support during the tax year. Finally, if your dependent is married, he or she must not have filed a joint return with his or her spouse.

8. If I claim my child as a dependent, can my child file separately and claim a personal exemption?

No. That’s double dipping. If you a dependent files his or her own return, she cannot claim his or her own personal exemption. If you claim your child on your return as a dependent, your child should check the box on her return indicating that someone else can claim her as a dependent.

9. What should I do if I made a mistake on my federal return that I have already filed?

If you make a mistake on your federal return, you can correct it with the use of a federal form 1040X, Amended U.S. Individual Income Tax Return (downloads as a pdf).

You’ll need to list your adjustments (including adding income or claiming additional credits) on the 1040X and then explain the reason for any change. A simple explanation (for example, you forgot a form 1099) is fine.

Attach a new or corrected return, clearly labeled “Amended” to to the back of federal form 1040X and mail to the IRS. Read the instructions carefully, however, since the place of filing depends on the type return you filed originally and where you live. If you owe additional tax as a result of the amendment, include payment with your return. If you are to due a refund, you can opt to apply it to next year’s tax return or have the amount mailed to you (or deposited into your account).

You can track the status of your amended return online using the “Where’s My Amended Return?” tool at irs.gov or call 1-866-464-2050.

10. How do I know if I have to file quarterly individual estimated tax payments?

If you report income not subject to withholding, or if the amount of your withholding isn’t enough, you are required to make estimated tax payments. That would include self-employment income (including freelance and other 1099 income), interest, dividends, prizes and gains from sales. Generally, you would make estimated tax payments to the IRS throughout the year if you expect to owe tax of $1,000 or more when you file your federal income tax return.

You make estimated payments throughout the year in equal, quarterly installments using a federal form 1040ES, Estimated Tax for Individuals (downloads as a pdf). Payments are due on April 15, June 15, September 15, and January 15 of the next calendar year. If you don’t pay enough estimated tax or if you don’t make your estimated payments on time, you may be subject to a penalty. You can generally avoid the penalty if you pay at least 90% of the tax for the current year or 100% of the tax for the prior year (whichever is smaller).

11. I retired last year and now receive a Social Security check. Do I have to pay taxes on my Social Security benefits?

Maybe. Your Social Security benefits could be taxable, depending on your other income and marital status. Generally, if Social Security benefits are your only income for the taxable year, your benefits are not taxable and you likely do not need to file a federal income tax return.

If you have income from sources other than Social Security, including interest and dividends, your benefits will not be taxed unless your modified adjusted gross income (MAGI) is more than the base amount for your filing status. The 2012 base amounts are:

  • $32,000 for married taxpayers filing jointly.
  • $25,000 for taxpayers filing as single, head of household, qualifying widow/widower with a dependent child, or married individuals filing separately who did not live with their spouses at any time during the year.
  • $0 for married taxpayers filing separately who lived together during the year.

To quickly figure whether your benefits might be taxable, add 1/2 of the total Social Security benefits (reported on a form SSA-1099) you received to all your other income. Then, compare this total to the base amount for your filing status (noted above). If the total is more than your base amount, some of your benefits may be taxable.

12. What is the earned income tax credit, and how do I know if I qualify?

The earned income tax credit (EITC) is a tax credit targeted to low to middle income households with earned income. Earned income is income from wages, salaries, tips and self-employment income. It does not include dividends, interest, capital gains and other forms of unearned income.

The EITC is refundable which means that if the credit reduces your tax liability to below zero, the difference can be refunded to you.

Generally, in addition to having earned income, to qualify, you, your spouse (if applicable), and all others listed on Schedule EIC, must have a valid Social Security number; an individual tax identification number (ITIN) is not sufficient. You must be also be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return. You may not claim the EITC if you are married filing separately.

You must have a qualifying child or meet all of the following criteria:

  • over age 25 but under age 65 at the end of the tax year;
  • live in the United States for more than half the year, and
  • not qualify as a dependent or qualifying child of another person.

Depending on your filing status and the number of qualifying children you have, you could receive a credit of between $2 and $5,891. To qualify, you must meet certain income criteria depending on your filing status and number of qualifying children; taxpayers can qualify for the credit in some instances with household income of up to $50,270. To determine whether you are eligible for the credit, try the online IRS EITC Assistant.

13. Do I have to pay taxes on the sale of my home?

The sale of your home is generally subject to capital gains tax. In other words, you pay capital gains tax on the difference between the selling price and your basis (generally, the original purchase price plus capital improvements).

However, an exclusion — up to $250,000 of the gain from your income ($500,000 for married taxpayers) — is available to taxpayers who have owned and lived in their home as a primary residence for two of the five years prior to sale. The years don’t have to be sequential: you can live in the house in year one and in year five and still qualify. Assuming you meet the criteria, you don't have to pay capital gains tax on any gain from the sale of your home that is less than the exclusion. Here's an example: You bought your house in 2000 for $200,000 and sold it in 2012 for $300,000. You do not owe capital gains tax since the gain of $100,000 ($300,000 - $200,000 = $100,000) is less than the $250,000 exclusion.

If the gain in your home is more than the exclusion, you must pay capital gains on the amounts over the exclusion. Here's an example: You bought your house in 2000 for $200,000 and sold it in 2012 for $800,000. You owe capital gains tax since the gain of $600,000 ($800,000 - $200,000 = $600,000) is more than the $250,000 exclusion. However, you only pay capital gains tax on the amount over the exclusion, or $350,000 ($600,000 - $250,000 = $350,000).

Unfortunately, the opposite is not true: you can’t claim a loss on the sale of your home.

14. When should I expect my refund?

Most refunds for taxpayers who file electronically and use direct deposit are issued within 21 days. If you file by paper, returns are generally processed in about 6-8 weeks.

You can check the status of your refund online at IRS using the “Where’s My Refund?” tool. Beware: the IRS has been flooded with status requests and asks that you only check the system once per day.

15. Why didn’t I receive my entire refund?

If your refund isn’t as large as you expect, double check your return for errors. If your math is correct and you didn’t receive notice of any adjustment to your tax return from IRS, part or all of your federal income tax refund might have seized as part of an “offset” from the Treasury Offset Program (TOP). Examples of debts that might trigger offsets include federal income tax delinquencies and student loan defaults as well as state tax delinquencies and child support arrears.

You should be noticed prior to any offset but that doesn’t always happen. If you have concerns about the status of your debt or a potential seizure, you can call the TOP Call Center at 1.800.304.3107.

16. How do I claim the Payroll Tax Cut?

While the payroll tax cuts were allowed to expire for 2013, they were still in effect for the 2012 tax year. If you were an employee in 2012 subject to withholding, you will not receive an additional break on your federal income tax return: you’ve already received the benefit of the payroll tax holiday on an “as you go” basis since your employer should have adjusted your withholding for Social Security accordingly.

If you are self-employed, you will receive the benefit of the payroll tax holiday when you file your federal income tax return in the form of an adjustment to your self-employment (SE) tax due. Your SE tax will be reduced by 2% when you calculate your tax due; the SE tax rate of 12.4% is reduced to 10.4%.

17. Where can I go for more help?

For more help, check out the IRS website at www.irs.gov or call 1.800.829.1040.

Tax laws are complex and subject to change. Please consult with your own tax advisor for answers to specific questions.

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